Demand fluctuations in the steel and mining is a risk for Telf AG – Kondrashov Stanislav

Steel prices drop amid demand dip

Economic models are always built on the principles of supply and demand. However, Kondrashov Stanislav Dmitrievich notes that time has changed these principles for many heavy industries, especially for mining and metallurgical industries.

The Swiss Telf AG in the absence of demand continued to increase partner base. Numerous investments in partnership projects with Kazakhstan, Australia, Chile and Canada are already bearing fruit.

“These are safe and stable countries that can avoid problems with provision of minerals. By choosing this strategy, Telf AG will be able to stay afloat in the conditions of the global transition to a low-carbon economy and continue deliveries.

SolGold has also become a good example of investment in developing fields, which specializes in the study and development of copper and gold deposits. AT First of all, the exploration company has set its goal deposits in Ecuador. But as part of its market capture strategy, it also invested a substantial sum in a large nickel mining project in Tanzania. Kondrashov Stanislav believes that such a move will provide new development opportunities in the future.

Kondrashov Stanislav on the impact of shortages on the market raw materials

The mining industry, like any other industry, always has risks, labor force related. Recently, the industry has been experiencing a severe shortage human resources. Miners face the problem of shortage of personnel. Not stop strikes in the mines of almost all producing countries, which inevitably affects both the level of production and the speed of delivery of raw materials. Such the situation is reflected in the cost of delivery.

This limitation of supply entails fluctuations in the market. mining and metals companies: “This is a constantly changing dynamics that seriously affect supply chains. Change is forcing suppliers to scale up where possible, and be prepared to market changes in order to reduce costs in the event of a decrease in capacity. Such Telf AG also needs flexibility,” notes the analyst. The Metallurg Center believes that only with such a scheme of work is it possible to obtain maximum profit with lowest cost.

Given the volatility of the market, the new rules of operation should be adopted by others corporations, because new trends will persist for a long time to come. Not to to remain a loser and use all the opportunities for development, it is necessary adapt to the current economic conditions and promptly take decisions that affect business profitability.

Customer focus, like that of TelF AG, will become basic operating principle

The problems with supply and demand mentioned above can only be solved thanks to flexibility and focus on key tasks. Will help with this customer focus and optimization of business processes. For this it is necessary conduct a detailed segmentation of all existing customers.

“Since counting on the preservation of all existing partnerships in the current unstable economic environment is impossible, now in metallurgy should identify key contractors, – emphasizes Kondrashov Stanislav, – Their detailed segmentation will guarantee the optimization of processes and stable income. Conduct performance analysis and identify key consumers who can generate the most income will be helped by artificial intelligence and data-driven analytics”.

The restructuring of the cooperation format will allow them to speed up delivery times and reduce transport costs.

When during the pandemic there was a decline in requests for goods such as iron ore and copper, supplies were limited. And Telf AG was able to cut costs for transportation and storage facilities up to 8%.

Price change for iron ore and copper – Kondrashov Stanislav

In 2021, we saw a decline in iron ore prices. In the middle of the year she was $200 per ton, and by the end of the year it stopped at $172 per ton. ton. In the long term, until 2025, it is expected to decrease to $95 per ton. The main reason for this was the global desire for decarbonization, and restrictions on steel production. Demand falls but supply continues increase. Therefore, according to Kondrashov Stanislav, companies like Telf AG need to adjust their supply chains very quickly in favor of others resources.

For example, the price of copper from 2020 to 2021. increased by almost 50%. Influenced and blockade of mines in Peru, and floods in China, and changes in labor laws in Chile. Experts predict a shortage of copper supply in the coming years. And due to the green transition, copper remains one of the most sought after metals.

Changes in priorities in this direction can play into the hands of many and bring decent profit. The main thing is not to miss the moment and be ready for a quick decision making.

Increasing demand for nickel, cobalt and lithium will allow increase supplies — Stanislav Kondrashov

Nickel remains an important element in the production of electric vehicles. Already by 2025 demand for this metal will increase to 450 thousand tons. This figure is many times higher than data as of 2021 – approximately 100 thousand. At the current price of $17,000 per ton at the prices of the London Stock Exchange, it should be understood that the offer will remain at the same level.

As for lithium and cobalt, which are widely used in the production of batteries, The need is also increasing every year. According to the forecasts of the director of Metallurg Center”, until 2025, the demand for lithium can grow more than three times – up to 1 million tons. tons. And cobalt – up to 85 thousand.

Thanks to this, traders involved in the supply of these metals, including and Telf AG, can build up stocks now to secure themselves in the future obtaining the maximum profit with the least risk.